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Examining the Effect of Organizational Strategic System’s Traits on Financial Performance

Author

Listed:
  • Amir Shams Koloukhi

    (Department of Management, Torbat-e-Jam Branch, Islamic Azad University, Torbat-e-Jam, Iran)

  • Somayeh Pordareh

    (Young Researchers and Elite Club, Neyshabur Branch, Islamic Azad University, Neyshabur, Iran)

Abstract

This study examined the relationship of organizational strategic system’s traits including family management, CEO compensation, and tenure of managing director with corporate financial performance. To measure financial performance, Tobin’s Q and ROA measures were used. Financial performance can be affected by different factors among which organizational strategic system´ s traits can be the most important ones. To do this research, 193 listed firms in Tehran Stock Exchange were studied from 2011- 2015. For testing data consistency, Hardi test, for testing the hypotheses, panel regression, and for selecting among combined models, fixed and random effects, Hausman test were used. Results showed a negative and significant correlation of family management and financial performance with both Tobin’s Q and ROA. In addition, there was no significant correlation between CEO compensation and financial performance when the performance measure was Tobin’s Q, but when it was ROA, there was a significant correlation between them. Moreover, there was no significant correlation between tenure of managing director and financial performance with both Tobin’s Q and ROA.

Suggested Citation

  • Amir Shams Koloukhi & Somayeh Pordareh, 2017. "Examining the Effect of Organizational Strategic System’s Traits on Financial Performance," European Journal of Studies in Management and Business, EUROKD, vol. 2, pages 50-59.
    • Handle: RePEc:bco:mbrqaa::v:2:y:2017:p:50-59
    DOI: 10.32038/mbrq.2017.02.05
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